Wall Street’s major indexes closed higher on Thursday, August 15, with the Nasdaq Composite surging over 2% fueled by strong July US retail sales data. This positive economic indicator eased concerns of an impending recession in the world’s largest economy. Retail sales rose 1.0% in July, recovering from a downwardly revised 0.2% decline in June. This data helped to alleviate fears of a sharp economic slowdown, which had been stoked by last week’s unexpected rise in the unemployment rate.
The Dow Jones Industrial Average climbed 554.67 points, or 1.39%, to 40,563.06. The S&P 500 added 88.01 points, or 1.61%, to 5,543.22, while the Nasdaq Composite advanced 401.90 points, or 2.34%, to close at 17,594.50.
Several key companies saw their stock prices rise significantly. Retail giant Walmart witnessed a 6.58% surge in its shares after raising its annual profit forecast for the second time this year. This optimistic outlook was driven by strong demand for affordable essentials from consumers. Competitors Target and Costco also posted gains of 4.35% and 1.69%, respectively.
Cisco Systems saw its shares jump 6.8% following a better-than-expected first-quarter revenue forecast and an announcement that it would cut 7% of its global workforce. Nike shares climbed 5.07% as billionaire investor William Ackman took new stakes in the sportswear company. Meanwhile, Ulta Beauty surged 11.17% after Warren Buffett’s Berkshire Hathaway disclosed a stake in the cosmetics retailer.
In the bond market, the 10-year Treasury yield edged up to 3.91% from 3.84% late Wednesday, buoyed by the strong economic data. The two-year Treasury yield, which more closely reflects expectations for Federal Reserve actions, increased to 4.09% from 3.96%.
Despite the upbeat data, traders continue to anticipate that the Federal Reserve will cut its main interest rate at its upcoming September meeting. However, expectations have shifted, with most now predicting a traditional quarter-point reduction rather than the half-point cut many foresaw just a week ago, when concerns about a slowing US economy were more pronounced.
